White House Pleads for Patience on TARP

Even as news broke mid-briefing that legislators reached their probable deal on the stimulus bill on Capitol Hill today, Robert Gibbs faced a grilling from reporters on the market reaction to the bank bailout plan announced Tuesday by Treasury Secretary Timothy Geithner.

“Yesterday’s speech, and framework were not designed for a one-day market reaction,” Gibbs said, referring to yesterday’s 350-point drop by the Dow.Later, he suggested a reason for the drop beyond the lack of certainty offered to Wall Street in Geithner’s announcement. “There was also a psychology involved… about a hope and a wish that bad assets would be paid for in an unreasonable way. That may have also inflated some of those expectations.”

But he admitted that “a fair summation” would be “we may not entirely know all of the property lines of what we’re dealing with” because banks may not trust each other for lending bank to bank, and because the government hasn’t seen all of what is on the institutional books.

Although Gibbs repeatedly stressed the need for the second phase of TARP spending process to be “transparent,” he ran into trouble over the same word later in the briefing. When asked why Obama’s campaign pledge of reforming congressional rules to make committee hearings such as today’s conference committee on the stimulus bill open to the public hadn’t happened, Gibbs initially said he’d have to look at what Congress had done.

The Washington Times reporter then argued that Republicans were correct in their argument that the stimulus discussions had happened behind closed doors. Essentially, Gibbs replied that, sure, but there were a lot of Republicans in on those closed-door meetings. Lynn Sweet interjected from the back of the room that the point wasn’t whether Republicans were involved, but whether the doors on such meetings were closed at all. As Gibbs defended that he’d been asked originally about Republicans, David Corn of Mother Jones backed Sweet up by asking if the President believed the conference should be open. Gibbs punted with a non-answer, saying he’d just like to see the deal that had been reached.

He also addressed the administration’s ordering of priorities, specifically why the housing crisis hasn’t been moved forward on the agenda.

“You know if somebody has a house but not a job, my guess is they’d say, ‘a job.’ If somebody has a job but not a house they might say ‘a home foreclosure.’ If somebody’s lost their job because, but can’t get a loan because of something that a CEO did in rigging the system, my sense is they might say, ‘regulation.’ Or, my guess is that millions… are struggling with a little bit of each one of these problems.”

Shorter White House stance: Look, we’re working on it.

“If we only had to do one thing, we’d probably have lighter circles under our eyes, and a little more of a spring in our step.”